Inergy Midstream LLC signed a definitive agreement to acquire Tres Palacios Gas Storage LLC for US$725 million plus reimbursement of certain capital expenditures.
This purchase includes the 38.4 billion cubic feet (Bcf) salt dome storage facility in Matagorda County, Texas, which features 27.1 Bcf of current working gas capacity and 11.4 Bcf of incremental working gas capacity that will be placed into service in 4Q 2010. The facility, about 100 miles outside of Houston, can also be expanded by 9.5 Bcf, which is expected to be placed into service by or before 2014. It currently has a maximum withdrawal capacity of 2.5 Bcf/d and a maximum injection capacity of 1 Bcf/d.
The Tres Palacios storage facility is connected to 10 intrastate and interstate pipelines via a 40-mile, 24” dual-pipe, looped header system that provides access to the Houston and San Antonio markets, as well as markets in the Northeast, Midwest, Southeast and Mid-Atlantic U.S. and parts of Mexico.
Roughly 90% of the facility’s existing storage capacity is under firm storage contracts and Inergy anticipates entering into firm storage contracts for the capacity being added in 4Q. The deal is expected to complete in the next 60 days.
“Inergy is very pleased to announce the acquisition of another premier midstream storage platform. The facility adds to Inergy’s portfolio of valuable natural gas storage assets and provides the partnership with an additional platform for growth. In addition to the specific capacity expansion plans at Tres Palacios, we expect to pursue a number of additional development opportunities around this asset with advantaged economics similar to our strategy and successful expansion efforts around our initial Stagecoach storage facility investment in the Northeast,” John Sherman, president and CEO of Inergy, said.
Earlier this year, Inergy Midstream acquired the Seneca Lake natural gas storage facility from New York State Electric & Gas Corp. for US$65 million. This facility has a storage capacity of about 2 billion cubic feet with a maximum withdrawal capability of 145 million cubic feet per day (MMcf/d) and a maximum injection capability of 75 MMcf/d. – Frank Nieto
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